The International Accounting Standards Board (IASB)

Wood and Sangster (2008) highlights that the IASC was initially founded by an Accountant’s International Study Group particularly in 1973. The IASB is an international but independent accounting setting body. Soon after becoming the international accounting standards setting body, the members of IASB finalized and decided to discuss, develop, in the global public interest, a single set of high quality international accounting standards. (About Us, n.d.). However, as IASB is UK-based and its standards are mostly applied to the UK based corporations, the U.S. corporations follow the accounting standards by the Financial Accounting Standards Board (FASB). The globalization and increase in cross border transactions necessited both boards to work closely and issue collective international accounting standards. This process begins the convergence between the IASB and the FASB particularly in 2002 Norfolk agreement, where both regulatory bodies developed a consensus to develop and issues a set of high quality compatible standards (Carmona and Trombetta, 2010). However, there exist various challenges that make it substantially difficult for the both bodies to ensure the global but uniform application of the international accounting standards. …
Since the IASB possesses no legal backing to implement its own developed international accounting standards, it would be substantially difficult for the IASB to ensure and monitor the global recognition and uniform application of the IFRS. Ironically, soon after the establishment of the IASC in the United Kingdom, the foundation of the FASB took place in the U.S. it would not be incorrect to say that the creation of the FASB was a counter measure to the existence and function of the IASC. Moreover, in the same year 1973, the FASB developed and drafted its own accounting standards and issued within the United States. Consistently, the FASB has been developing the Generally Accepted Accounting Practices (GAAP) as a counter measures for the IASs being produced by the IASB till the year of 2002. Furthermore, the FASB works as a competitor to the IASB. Both have agreed to the IFRS would be implemented in the United States of America by the end of 2015. This is an endeavour to introduce the global uniform application and practice of the IFRS and this would bring a forward step toward the attainment of the global application and practice of the international accounting frameworks and standards. However, this global and uniform application received a severe blow when the FASB independently and separately outlined, developed and published its own vision on how to carry out the process of reforms in the accounting of financial instruments (Veron, 2010). Also, the IASC Foundation has been widely criticized on its approach towards entertaining its mission. In this regard, the European banking sector highlights its reservations over the certain announcements of the IASC. Consequently, it has heightened hostitlity between the two. the hostility becomes